Public Company

A company that has issued securities through an initial public offering (IPO) and is traded on at least one stock exchange or in the over the counter market. Although a small percentage of shares may be initially "floated" to the public, the act of becoming a public company allows the market to determine the value of the entire company through daily trading.

Public companies have inherent advantages over private companies, including the ability to sell future equity stakes and increased access to the debt markets. With these advantages, however, comes increased regulatory scrutiny and less control for majority owners and company founders.

Once a company goes public, it has to answer to its shareholders. For example, certain corporate structure changes and amendments must be brought up for shareholder vote. Shareholders can also vote with their dollars by bidding up the company to a premium valuation or selling it to a level below its intrinsic value.

Public companies must meet stringent reporting requirements set out by the Securities and Exchange Commission (SEC), including the public disclosure of financial statements and annual 10-k reports discussing the state of the company. Each stock exchange also has specific financial and reporting guidelines that govern whether a stock is allowed to be listed for trading.

Investment dictionary. . 2012.

Look at other dictionaries:

  • public company — index utility (public service) Burton s Legal Thesaurus. William C. Burton. 2006 public company …   Law dictionary

  • public company — public companies N COUNT A public company is a company whose shares can be bought by the general public …   English dictionary

  • public company — n a company that offers its ↑shares for sale on the ↑stock exchange American Equivalent: public corporation …   Dictionary of contemporary English

  • public company — /ˈpablik ˈkɔmpani, ingl. ˈpʌblɪk ˈkʌmpənɪ/ [loc. ingl., propr. «società (company) pubblica (public)»] loc. sost. f. inv. (econ.) società ad azionariato diffuso …   Sinonimi e Contrari. Terza edizione

  • public company — ► NOUN ▪ a company whose shares are traded freely on a stock exchange …   English terms dictionary

  • public company — noun MAINLY BRITISH a PUBLIC CORPORATION …   Usage of the words and phrases in modern English

  • Public company — A public company usually refers to a company that is permitted to offer its registered securities (stock, bonds, etc.) for sale to the general public, typically through a stock exchange, but also may include companies whose stock is traded over… …   Wikipedia

  • public company — A company that has held an initial public offering and whose shares are traded on a stock exchange or in the over the counter market. Public companies are subject to periodic filing and other obligations under the federal securities laws.… …   Financial and business terms

  • public company — Brit. a company that has more than 50 shareholders and whose shares are offered for public subscription. Cf. private company. * * * ˌpublic ˈcompany [public company] (also ˌpublic ˌlimited ˈcompany) (both BrE) ( …   Useful english dictionary

  • public company — UK / US noun [countable] Word forms public company : singular public company plural public companies business a company whose shares you can buy on the stock exchange …   English dictionary

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